Where does your business sit on the digital transformation maturity curve?

Every company and every industry needs to chart its own digital transformation. There is no cookbook and no set of ingredients that you can or should blindly follow. Instead, companies must be willing to address and reform everything about the way they work — their people, their processes and their technology.

Maturity Level One: If it ain’t broke …

Are you comfortable exactly where you are right now, and don’t see any particular need to change? Is transformation something that happens to other people?

If so, you probably work in a company where management wants you to focus on delivering business-as-usual activities in the most cost-effective manner.

Chances are that the quality of your IT services relies very much to the individual qualities of your IT manager, and this quality changes with the personnel. Cyber security is likely used as an excuse not to try new things, and when you do investigate new technologies that investigation is so thorough that it might take years to implement.

In such an environment, don’t be surprised if business managers start trying to find their own solutions, independent of the IT group — which is likely seen as an impediment to change.

You are at risk of being overrun by more nimble competitors, scaling your customer interactions will likely prove difficult, and you might have a hard time attracting the best talent.

On the upside, the people who work with you know what to expect every day they come to work, you will be rewarded for driving costs out of the organisation, and once you finally do get around to signing off on an investment there is a strong likelihood you will still be using it years later.

Maturity Level Two: A new beginning

The opportunities for transformation are apparent and likely there are some motivated advocates pushing the company to consider alternative ways of working. The motivations could include new revenue opportunities or better customer experiences.

It’s likely, though, that there is little coordination around the efforts. Nor is there any significant work underway ensuring the culture of the business is equipped for the changes, and to exploit the outputs of change.

It is also likely that some managers have already taken things into their own hands, buying cloud-based solutions. But just as likely these cloud services haven’t been considered in the overall architecture of the company, but instead are designed to meet a specific need.

Where proof of concepts are being built, the approach is likely more tactical than strategic.

All in all, new approaches to working such as Software as a Service (SaaS) or Infrastructure as a Service are likely to be implemented in piecemeal ways. The more advanced companies at this stage have probably gone as far as at least considering policies for information sharing and collaboration.

The good news is that those SaaS services are probably already delivering benefits to the company, and demonstrating the value new ways of working can offer.

However, it’s just as likely that at this stage the company is only able to address narrow, tactical and operational transformation initiatives, and any expertise that has been developed remains locked away in isolated pockets in the company — meaning others can’t learn from the experience.

Maturity Level 3 : Good intentions

The leadership team is actively — and personally — pursuing the organisation’s transformation. Furthermore, business strategy and IT strategy are well-aligned and there is a strong and growing appetite for more transformational activities.

There are active programs underway to replace legacy on-premises core systems with SaaS.

The preference is to make use of enterprise software ecosystems over multiple business units, shifting the focus to service journeys across (and beyond) the organisation, rather than delivering static departmental solutions. The main objective for new investments shifts to enterprise-wide transparency, productivity and best practices.

This has made procurement easier, IT is more likely focused on adding value to the business than keeping the lights on, and the criticality of data to strategy is regained at the leadership level.

On the downside, you are likely in the thick of the difficult task of change management, with counter-revolutionaries looking to slow down progress or even reverse it as their comfortable ways of working come under threat.

This is also the moment when integration is especially complex, during the transformation from legacy to SaaS core systems. But even here the good news is, it does get easier.

Maturity Level 4: Scalability

Transformation is no longer an aspiration — now it’s a mindset. The challenge at this level is: how do you scale?

Happily, the cultural architecture is in place. Transformation is organised as a special discipline and viewed as every business unit’s responsibility. The executive group frequently questions internal business plans through a digital transformation lens. The IT strategy is not only aligned with business strategy, but is viewed as critical for business growth.

By this stage companies have freed themselves from lengthy procurement cycles and have instead built an approach to procurement that aligns with the organisational need for agility.

This is an organisation that is truly focused on transformation — that values learning, and has created a formal process for identifying, prioritising and implementing new ideas.

Because of the smart way they buy technology these organisations can experiment with innovations at speed, and with minimal impact.

But there’s still work to be done. Not all the information silos have been broken down, and demand for integration services is at its peak. With information so distributed, data governance emerges as a key concern.

Maturity Level 5: The bee’s knees

You are the bee’s knees — a trailblazer in transformation.

Transformation is embedded into company culture and you employ best-practices for the procurement of technology. Business and IT have a strong collaborative relationship, and new service ideas get brought to life quickly.

Cyber security is largely automated by the IT group, leaving the business to define the level of risk they are prepared to accept for specific services.

The organisation’s approach to delivering new services and projects is both agile and sustainable. This transformation mindset is understood and adopted by all staff — from senior executives to people in the field — as a key to future growth.

In this final stage, transformation skills are well-distributed across the organisation and transformation-related skills are treated as core competencies for staff. A strong culture of experimentation means staff are free to innovate without fear of failure — because the company recognises that real experiments never actually fail, they just deliver different learnings.

If there’s a downside, it’s probably keeping people’s expectations in check — and you will need a robust process for prioritisation. Transformation never sleeps, and so your organisation will need a sophisticated strategy for continued transformation to ensure you remain at this maturity level.

About this author

Andrew Birmingham is the director of the Which-50 Digital Intelligence Unit of which TechnologyOne is a corporate member. Members provide their insights and expertise for the benefit of the Which-50 community. Membership fees apply.

The Author

Andrew Birmingham

Andrew Birmingham is the editor-in-chief and publisher of Which-50. He is the former associate publisher of The Australian Financial Review and remains a contributing editor, and during his career he has reported on the Australian media, technology, finance, life science and related sectors over a period spanning 20 years. His work has been published by The AFR, The Australian, The Sydney Morning Herald, The Age, MIS, Computerworld, CIO, ARN, Network World, CRN Australia, and My Business.